Proper neuronal function requires the preservation of appropriate neural excitability. An adaptive increase in neural excitability after exposure to agents that depress neuronal signaling blunts the sedative drug effects upon subsequent drug exposure. This adaptive response to drug exposure leads to changes in drug induced behaviors such as tolerance, withdrawal and addiction. Here I use Drosophila melanogaster to study the cellular and neuronal components which mediate behavioral tolerance to the anesthetic benzyl alcohol. I demonstrate that rapid tolerance to benzyl alcohol is a pharmacodynamic mechanism independent of drug metabolism. Furthermore, tolerance is a cell autonomous response which occurs in the absence of neural signaling. Using genetic and pharmacological manipulations I find the synapse to play an important role in the development of tolerance. In addition, the neural circuits that regulate arousal and sleep also alter benzyl alcohol sensitivity. Beyond previously described transcriptional mechanisms I find a post-translational role of the Ca2+-activated K+-channel, slowpoke in the development of tolerance. Finally, I explore a form of juvenile onset tolerance, which may have origins that differ from rapid tolerance. The implications of this study go beyond tolerance in Drosophila melanogaster to benzyl alcohol and can shed light on human drug tolerance, withdrawal and addiction.